Has the energy price crisis accelerated the need for sustainable buildings?

It’s hard not to get sucked into the recent updates about the cost of living crisis in the UK at the moment; they are coming thick and fast on a daily basis. And while the effects on households are set to be devastating, the forecast for businesses doesn’t look bright, either.

As well as cautious Britons buying less in an attempt to save money, the ‘cost of doing business crisis’ presents its own plethora of issues for companies. Since October, the renewal of energy contracts has seen business bills increase, which could potentially lead to a number of smaller companies being put out of business altogether. And since the Autumn Statement, things only look bleaker for many across the country. 

This begs the question: could more sustainable buildings be the answer to surviving the energy price crisis?

The energy price crisis so far

Energy prices were set to rise by a further 80% in October 2022, but the Energy Price Guarantee capped this further increase at 27%. This will continue after April 2023, however, the energy price freeze threshold will rise by £500 for the average household. In addition, even with the Government’s recently announced Energy Bill Relief Scheme for businesses, they will still be paying exceedingly more than they were last winter. 

Elsewhere, the increased prices could be the push employees needed to start heading back to the office. However, other reports suggest that UK businesses may start asking workers to continue working from home to help them save on energy bills this winter. 

In early November 2022, the Climate Change Committee’s Chairman, Lord Deben wrote to the Chancellor of the Exchequer Rt Hon Jeremy Hunt MP, urging the Government to lead by example in the investment of energy efficiency of the public estate, helping both national and local Government efforts to reduce energy demand. Not only would this lower costs and dependency on non-renewable energy sources, but it would help to combat climate change. 

Later in the month during the Autumn Statement, the Chancellor announced that the Government would make an additional £6 billion available between 2025- 2028 to, “drive improvements in energy efficiency to bring down bills for households, businesses and the public sector.” The Chancellor also announced the formation of a new  Energy Efficiency Taskforce, hopefully, this will be a step towards offering, clear, long-term policies towards incentivising energy efficiency across domestic and commercial properties, however, many will still feel more could be done to help them over the coming years.

One of the most favoured options is retrofitting buildings with green technology to help make them more sustainable and energy efficient. Whilst this could initially set businesses back, it will help them in the long run. However, more needs to be done to ensure this becomes more widespread, with RICS calling for the establishment of a UK-wide retrofit programme to help meet climate targets in their ‘Decarbonising UK real estate report’.

How businesses are responding to rising energy bills

Fitting existing buildings with technology like smart meters, solar panels and heat pumps will help by generating renewable energy. This helps to make buildings more energy efficient, as they can reduce using more traditional sources of energy, therefore helping them to reach their net zero carbon targets. One sustainable business has already halved their energy bills by implementing smart technologies. Almost Off Grid has run off its own solar panels for over nine years now, more than paying for themselves in saved energy bills. The company also uses a solar battery and electric vehicles. 

PropTech solutions offer advanced benefits that can help offices and the built environment run more sustainably – and therefore more cheaply – in the long run. It is already playing a part in making buildings more attractive to tenants which will help make them more comfortable and productive in these spaces. In fact, green buildings, such as homes, commercial and office buildings, will typically see a 30% reduction in energy usage, bills and carbon as a result of smart technology according to a whitepaper from Schneider Electric. 

What’s more, with a boom in investment in environmental, social, and corporate governance (ESG), streamlining, gathering, and reporting data in buildings is looking to be an even more important element for businesses looking for sustainable offices. Smart lighting and plugs, humidity and flood sensors, and other technology that make it easier for staff and residents to use less energy become even more appealing in the light of a ‘cost of doing business crisis’.

Investing in future sustainability

Tools like Demand Logic can be fitted into existing buildings, as well as new developments, to help give tenants and building managers more control over how energy is used in their properties. From sensors that detect where light and heating need to be used to reporting on issues that make offices more comfortable and energy efficient, it’s proven to help buildings reduce their bills by up to 30%.

So, in light of the cost of living crisis, businesses struggling with their outgoings might consider investing in smart, sustainable technologies. It might seem like another expense, but in the long term, being ahead of the curve when the need for sustainable buildings and PropTech solutions comes to a head will be beneficial for businesses and properties alike.
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